New System Could Help Smaller, New Companies

OCEAN CITY — What was said would put the “little guy” out of business, could actually help the “little guy” start his own.

While some in the taxi industry argued that putting a medallion system into effect would put smaller cab companies out of business, the new system might be favorable to some independent cabbies, who might be looking to venture out on their own.

Kenny Ethridge, who has been driving a cab in Ocean City (mostly for Niteclub Taxi) for four years, thinks that the new medallion system could actually help him as he’s planning on acquiring a medallion at the March 1 sale at City Hall, buying a cab within 30 days, and starting his own business, alleged to be called “The Cab Guy.”

“I was hoping to buy a car next week and get the thing on the road and start working for myself,” said Ethridge. “I think the medallion system is going to dwindle the size of a lot of owner’s fleets, since they won’t be able to afford it. But, for me, just having one car, I can afford to pay for a medallion, and if it’s my business, I won’t have to split the money with an employer or lease the vehicle out per week.”

Ethridge says that although he’s been grateful to his current employer for the opportunity, the harsh reality for cab drivers in Ocean City is that they only make substantial money 20 weeks out of the year, and if the money is split (usually 50/50 between driver and employer), it’s often not enough to live on.

“The season seems like it’s getting shorter and right now, there’s hardly any money out there,” said Ethridge. “I’ve got a wife and a 4 year old to support and if I can own my own cab, and get out there 20 weeks in the summer, I can make enough money for us to get through the winter for sure.”

Despite his optimism in starting his own business, Ethridge agrees with most in the taxi industry that the medallion fees that the Mayor and City Council are soon to set in place are too high in his opinion.

“For $2,000 to get a cab on the road this year [$1,500 medallion fee plus $500 annual renewal fee] plus what we already have to pay per car now is just way too much,” said Ethridge. “So, I think you are going to see a lot of guys that had 14 cars put maybe nine or 10 on the road, and the guy with 40 might only be able to put 20.”

Century Taxi owner Ken Hovance agrees that the size of certain companies in town may decrease if this medallion ordinance passes as written through the required two readings, but said he understands what the town is trying to do.

“I’m a businessman, and I understand why the town is trying to do this, and it’s because I know that the town needs more money,” said Hovance. “At the same time, I do like that they chose to let the owner’s finance the medallion fee over five months. Still, I think everyone was upset by the price, especially the annual renewal fee [$500 per car], which is why everyone stormed out of the meeting on Tuesday.”

Hovance, whose company offers seven high-end vehicles to the public, said smaller fleets and independent owners will more than likely have a slight advantage under the medallion system, but noted that all companies and independents are going to have to absorb the same stinging cost of the $1,500 medallion.

“We are all going to have to try that much harder if we want to stay on the road and in this business,” said Hovance. “This was going to be a tough year already, and now it’s going to be really tough for everyone driving a cab.”

Ethridge also noted that if the usual number of cabs on the road diminishes based on the price of the medallions, people may find themselves on the bus or behind the wheel at 2 a.m. rather than at the cab stand.

“I’m worried that if there are less cabs on the road that more people are just going to think they can drive home at the end of the night, and that’s a public safety concern that I don’t think the Mayor and Council have thought about,” said Ethridge. “This is probably going to help the little guy like me out, but it’s definitely not going to help the taxi industry as a whole.”

Ethridge will be forced to wait in a separate line at City Hall on March 1, as the current 160 cab licensees will have essential “first dibs” on the medallions. If fewer than 160 medallions are sold, which the majority of those on the council believe will happen, the remaining medallions will be offered to new taxi professionals.

Mayor Rick Meehan also noted that the town could decide to hold some of the left over medallions and sell them at an auction at a later date.

“What they need to understand is that the $1,500 that the medallions will be offered for on March 1 is the lowest that they will ever be, because they are going to go up in value, almost immediately,” said Meehan.

In a bit of a wild, but still notable, comparison, Kathy Mathias, assistant to the City Manager noted in her taxicab medallion study that New York City has had such a system in place since the 1930’s and have had a cap on the number of taxis in place ever since.

Mathias said that because of this system, the last medallion that auctioned off in New York City sold for $766,000.

“I know for a fact that I probably won’t be able to make it if I keep driving a car for someone else,” said Ethridge. “They are either going to have to pay drivers less to offset this new cost, or they are going to start leasing cars for more money. If I work for myself, though, and I don’t have to split my money with anyone, I think I’ve got as good of a shot as anyone.”

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